OF  THE 


DIRECTORS 


REPRESENTING  THE  CITY 


IN  THE 


altinior  t 


c 

K 


RAIL  ROAl)  COMPANY 


J 


-  t 


TO  THE 


Map  ani)  (Citij  Council 


OF  BALTIMORE. 


-« - V  -4- 


BALTIMORE: 

PRINTED  BY  JAMES  LUCAS  &  SON, 

%  “STEAM  PRESS.” 

Corner  of  Culvert  street  and  Lovely  Lane 


1855. 


REPORT. 


To  the  Committee  of  Ways  and  Means 

of  the  City  Council  of  Baltimore  : 

Gentlemen  : 

The  Directors  of  the  Baltimore  and  Ohio  Bail  Boad 
Company,  on  the  part  of  the  City  of  Baltimore,  have  the 
honor  to  acknowledge  the  receipt  of  a  note  dated  the  17th 
ult.,  propounding  certain  inquiries,  touching  the  condition 
and  prospects  of  the  Baltimore  and  Ohio  Bail  Boad  Com¬ 
pany. 

In  making  these  inquiries  you  have  doubtless  been 
prompted  by  a  proper  appreciation  of  the  magnitude  and 
importance  of  this  great  enterprise,  not  only  as  a  means 
to  relieve  the  city  from  the  heavy  debt  incurred  to  aid  in 
its  completion,  but  also  as  the  instrument  to  build  up  a 
trade  upon  which  rests  the  future  hopes  of  Baltimore. 

Sharing  in  common  with  our  fellow-citizens,  the  deep 
solicitude  felt  for  its  success,  and  sensible  of  the  responsi¬ 
bilities  arising  from  a  participation  in  its  direction,  we 
have  at  all  times  endeavored  to  discharge  our  duties  so  as 
to  promote  the  interest  of  all  parties,  and  not  disappoint 
the  hopes  of  our  friends. 

In  the  statements  of  accounts  herein  submitted,  nothing 
has  been  left  to  conjecture — save  and  except  the  estimates 
of  earnings  for  time  to  come,  and  they  are  based  upon  the 
actual  results  of  previous  years — but  all  is  the  result  of  a 


^2.52,02. 


4 


patient  and  rigid  examination  of  accounts,  derived  from 
statements  and  data  furnished  by  the  President,  Treasurer 
and  Auditor  of  the  Company,  who  have  at  all  times 
shown  themselves  most  willing  to  offer  every  aid  and 
facility  in  obtaining  full  information  and  particulars. 

In  the  Baltimore  and  Ohio  Kail  Road  Company,  you 
hold  35,882  shares  of  its  stock,  amounting  to  $3,588,200 ; 
and  in  addition  to  this  large  subscription  to  the  capital 
stock  of  the  company,  you  have  recently  granted  to  it 
a  loan  of  your  bonds  to  the  amount  of  $5,000,000.  Be¬ 
sides  the  large  interest  in  this  company,  you  have  also 
endorsed  the.  bonds  of  the  North-Western  Virginia  Rail 
Road  Company  to  the  amount  of  $1,500,000,  in  which 
you  are  responsible  for  principal  and  interest. 

This  last  mentioned  road  may  justly  he  regarded  as 
part  and  parcel  of  the  Baltimore  and  Ohio  Rail  Road, 
and  can  only  he  maintained  by  its  favor  and  success. 
The  aggregate  sum  which  you  have  thus  invested,  and  for 
which  you  are  answerable,  by  endorsements,  is  $10,088,200. 


The  annual  interest  is  as  follows  : 

Stock  in  the  Baltimore  and  Ohio  Rail  Road  Co . $215,292 

Bonds  loaned  to  w  u  “•  .  300,000 

Endorsement  on  Bonds  of  N.  W.  Va.  R.  R.  Co .  90,000 

Total  amount  interest, .  $605,292 


The  Directors  of  the  Baltimore  and  Ohio  Rail  Road 
Company,  on  the  part  of  the  private  stockholders,  desire 
you  to  retire  from  a  participation  in  the  direction  and 
management  of  its  affairs,  and  in  their  private  capacity 
have  offered  to  purchase  your  stock  by  the  payment  of  an 
annuity  in  perpetuity  of  $143,528,  leaving  a  permanent 
annual  deficit  on  account  of  interest  on  the  stock  of 
$71,764,  to  he  provided  for  by  taxation;  and,  if  by  mis¬ 
management,  these  companies  should  fail  to  meet  their 
engagements,  then  the  annual  sum  to  he  provided  by  the 


•  i 
I 


5 


city  would  be  $605,292.  The  sale  of  your  stock  ivill  not 
release  you  from  your  responsibilities  for  the  interest  and 
principal  of  the  bonds. 

Of  the  financial  condition  of  the  North-Western  Vir¬ 
ginia  Rail  Road  Company,  we  are  not  advised ;  and,  not 
being  charged  with  any  participation  in  its  affairs,  we 
forebare  to  make  inquiry  or  speak  of  its  condition.  Of 
the  Baltimore  and  Ohio  Rail  Road  Company,  we  think  we 
may  safely  say  it  is  passed  its  ordeal ;  and,  if  the  same 
prudent  councils  and  administrations  which  now  direct 
its  affairs,  should  still  prevail,  no  fears  of  future  success 
need  be  entertained.  On  the  contrary,  we  are  firmty  per¬ 
suaded,  that  the  hope  so  long  deferred,  will  speedily  be 
realized,  not  only  in  the  regular  payment  of  cash  divi¬ 
dends,  but  in  a  large  accession  of  profitable  trade.  By  a 
reference  to  the  following  statements,  the  present  con¬ 
dition  of  the  company  may  be  seen  at  a  glance. 

Some  estimates  of  the  future  are  also  furnished,  the 
accuracy  of  which  we  believe  may  be  depended  on,  as  they 
are  based  upon  the  actual  results  of  the  past. 

(Account  A.) 

General  Liabilities. 

Stock  30,000  shares  State  of  Maryland,  pre¬ 
ferred,  . $3,000,000 

u  6,855  do.  unpreferred, . 685,500 

“  53,265  do.  individuals, . 5,3*26,500 

“  35,882  do.  City  of  Balt . 3,588,200 

w  5,000  do.  City  of  Wheeling, ..  .500,000 

187,02  do.  Scrip  not  funded,  ....  18,702 


$13,118,902 


# 


6 

FUNDED  DEBT.  4 

Loans  secured  by  Bond  and  Mortgage. 

No.  1,6  per  cent.,  due  1854,  balance  out¬ 
standing, . $386,053  97 

u  2,  6  per  cent,  due  1867, . 1,000,000  00 

“  3,  do.  1856, ’7,  ’8,  ’9 
and  60,  in  five  equal  instal¬ 
ments  of  $133,333  331,  each.  566,666  67 
4‘  4,  6  per  cent,  coupon  bonds  due 

1875 . 1,128,500  00 

u  5,  do.  do.  due  1880,  ...700,000  00 

“  6,  do.  do.  due  1885,.  .2,500,000  00 

“  7,  The  portion  of  the  five  mil¬ 
lion  loan  rec’d  from  the  City,  2,800,000  00 

$9,081,220  64 

Less  amount,  the  payment  of  which 
is  provided  for  in  the  estimates 
now  presented  for  the  year  end¬ 
ing  April  1,  1856, . 499,387  30 

-  8,581,833  34 

Floating  debt,  (including  that  part  of  the  bonded 

debt  which  is  to  be  liquidated  this  year,)  the 
outstanding  balance  of  No.  1  bonds  deducted 
from  the  funded  debt  for  payment  in  the  current 

year, . $386,053  97 

The  first  instalment  of 

No.  3  bonds  do _ 113,333  33 

- $499,387  30 

Winans,  on  contract  for  30  engines,  . .  156,000  00 
Contingencies,  in  the  shape  of  final 
settlements  of  old  contractors’ 
debts,  new  work,  &c.,  estimated.  .  .200,000  00 

Bills  payable . 1,372,438  74 

-  2,227,826  04 


$23,928,561  38 


. 


7 


(Account  B.) 

Liabilities  to  be  provided  for  in  the  year ,  from  1st  April 
1855  to  1st.  April  1856. 

The  entire  floating  debt,  including  a  portion  of  the 

bonded  debt,  as  stated  in  account  A, . $2,227,826  04 

Working  expenses,  including  repairs,  estimated  at 
60  per  cent,  of  the  gross  receipts, .  $2,400,000  00 
Less  for  materials  on  hand,  to  be  used 
in  repairs,  the  cost  of  which  is  in¬ 
cluded  in  u  bills  payable,” .  250,000  00 

-  2,150,000  00 

Payable  to  the  Washington  Branch  for  capitation 

tax,  dividends  and  surplus, .  150,000  00 

All  interest  and  ground  rents, .  840,000  00 

$5,367,826  04 

Ways  and  Means. 

City  bonds  remaining  unsold  out  of  the 

$2,800,000  received  heretofore,. . .  .$558,056  00 
Reimbursement  out  of  the  city  loan  yet 
to  be  received  for  expenditure  in  ad¬ 
vance,  on  second  track  and  tunnels,. .  543,700  65 
N.  W.  Va.  R.  R.  bonds  and  bills  re¬ 
ceivable  on  hand, . 226,250  00 

Gross  earnings  of  the  Company  for  the 
year  ending  1st  April,  1856,  estimated 
at  the  same  sum  as  received  for  the 
corresponding  months  last  year,.  . .  .4,000,000  00 


Cash  in  bank  on  31st  March, . 197,776  65 

-  5,525,783  30 

Surplus, .  $157,957  26 

Unavailable  Assets. 

Loan  to  Central  Ohio  Rail  Road, . $400,000 

Stock  in  the  Pittsburg  and  Connelsville 

Rail  Road  Company, . 35,000 

Stock  in  the  Washington  Branch  Rail 

Road, . 1,016,800 

Sinking  fund, . 20,000 


$1,471,800 


* 


8 


(Account  C.) 

Table  showing  on  tvhat  account  interest  is  payable  and 

the  amount. 


Interest  on  State  preferred  stock, ....  $3,000,000  00 


u  No.  1  Bonds,  balance, . 386,053  97 

“  No.  2  “  ..1,000,000  00 

“  No.  3  “  566,666  661 

“  No.  4  “  1,128,500  00 

“  No.  5  “  700,000  00 

“  No.  6  “  ....2,500,000  00 

u  portion  of  City  loan  rec’d,  2,800,000  00 
“  do  to  be  reimbursed 


$180,000  00 
23,163  24 
60,000  00 
34,000  00 
67,710  00 
42,000  00 
150,000  00 
168,000  00 


for  expenditure  on  second 

track  and  tunnels, . 543,700  00  32,622  00 

tt  Floating-  debt,  average,.  . . .  1,372,438  74  57,504  76 

Ground  rents, .  25,000  00 


Total  interest, .  $840,000  00 

(Account  E.) 

Five  Million  Loan  granted  by  the  City  to  aid  in  fund¬ 
ing  Floating  Debts ,  Arching  Tunnels ,  and  constructing 
Second  Track. 


The  amount  received  from  the  City  has  been  applied  as  follows  : 
Deposited  with  the  City  Register  10  per  cent,  for  a 

sinking  fund,  as  provided  by  ordinance,  $280,000  00 

For  funding  floating  debt, . 2,000,000  00 

For  second  track, . 520,000  00 

- $2,800,00 

The  amount  to  be  received  from  the  City  to  be 
applied  as  follows : 

For  sinking  fund, . $220,000  00 

Reimbursement  of  sum  expended  on 

second  track  and  tunnels,  in  advance,. .  .543,700  65 

For  second  track  and  tunnels,  to  be  con- 

structed  from  time  to  time,  as  the 

wants  of  the  Company  mav  require,. .  1,436,299  35 

-  2,200,000 

$5,000,000 

$2,800,000 

.2,200,000 


Amount  received  from  the  City 
a  yet  to  be  received,. . .  . 


$5,000,000 


9 


(Account  F.) 

Second  Track  and  Tunnels. 

There  has  been  expended  upon  second  track  out  of 
the  earnings  of  the  Company,  in  advance  of  the 

aid  from  the  city, .  $967,413  73 

And  upon  the  tunnels, .  96,286  92 

$1,063,700  65 

Deduct  amount  set  apart  for  second  track  out  of  the 
$2,800,000  received, .  520,000  00 


This  amount  to  be  reimbursed  out  of  city  loan,. . .  .  $543,700  65 

(Account  G.) 

Amount  of  Floating  Debt ,  reported  to  City  Councils  in 

November ,  1853. 

Balance  of  bonds  No.  1, .  $712,468  72 

Loans  on  call, . $38S,710  06 

Bills  payable, . 1,974,999  83 

Amount  due  contractors, . 19,382  66 

- -  2,383,092  55 

Contracts  for  machinery,  to  be  completed, .  178,694  17 

Final  estimates,  adjusted  since  September  30th,. . .  .  56,367  38 

Cash  borrowed  under  personal  security  of  Directors,  240,000  00 

$3,570,622  82 

Less  $878,500,  loan  of  No.  6,  on  hand,  valued  at  $80,  702,800  00 

Amount  as  reported, . $2,867,822  82 

If  to  this  be  added  the  contract  for  30  engines  from 

Ross  Winans,  payable  monthly, .  348,000  00 


$3,215,822  82 


And  in  consequence  of  delay  in  the  loan  from  the 
City,  the  Directors  were  obliged  to  make  a  nego¬ 
tiation,  which  was  approved  by  the  Board,  for  a 
purchase,  on  a  liberal  credit,  of  N.  W.  Va.  R.  R. 
bonds,  to  be  used  as  collateral  security  for  a  loan 
to  meet  maturing  old  engagements  for  machinery, 


650,000  00 


2 


$3,865,822  82 


10 


Of  this  floating  indebtedness,  on  1st  January, 

3854,  there  remains  on  1st  April,  1855: 

Bills  payable, . $1,372,438  74 

Winans’  engines, . 156,000  00 

Bonds  No.  1, . 386,053  97 

- 1,914,492  71 

Showing  the  indebtedness  to  have  been  reduced,. .  .$1,951,330  11 

(Account  H.) 

A  Table  showing  the  sum  required  to  be  appropriated  each 
year  to  pay  the  principal  of  the  folloiuing  debts ,  as  they 
may  mature ,  beginning  with  1855,  and  so  continuing. 

In  the  calculation  upon  which  this  is  based,  the  interest  on  the 
debt  is  assumed  to  be  paid  without  recourse  to  the  fund. 


January  1,  1855,  No.  2  bonds 

i,  payable  1867 — 12  years, 

$1,000,000 

$58,950 

“  “  No.  4  “ 

“  1875—20  “ 

1,128,500 

30,480 

11  “  No.  5  “ 

“  1880—25  “ 

700,000 

12,500 

“  “  No.  6  “ 

1885—30  “ 

2,500,000 

31,535 

Annual  amount  to  be  paid  : 

• 

From  January  1st,  1855, 

to  January  1st,  1867 — 12 

years,  $133  465 

“  “  1867, 

“  1875—  8 

U 

74,515 

“  “  1875, 

“  1880—  5 

u 

44,035 

“  “  1880, 

“  1885—  5 

i  c 

31,535 

Bonds  Nos.  1  and  3  being  provided  for,  and  al^o  the  five  million 
loan,  no  calculations  are  here  made  for  them. 


j 


% 


* 


11 


(Account  D.) 


An  exhibit  of  receipts  for  the  years  mentioned  in  the  Ta¬ 
ble ,  ending  with  the  year  1854;  and  also  an  estimate  for 
the  six  succeeding  years,  ending  with  the  year  1860. 


Gross  receipts 
for  5  years  end¬ 
ing  30th  Sept  , 
1854,  also  an  es¬ 
timate  for  six 
years,  ending 
30th  Sept.,  1860. 

Working  expen¬ 
ses  including  re- 
pairs,  estimated 
at 60 percent,  of 
gross  receipts. 

. 

Net  profits  after 
deducting  work¬ 
ing  expenses 
and  repairs. 

Annual  in¬ 
crease. 

J 

Decrease. 

1850 

$1,343,805.2; 
1.349, 222.  ;5 

■  | 

$102,599.82 

5,4i;.48 

1851 

1852 

1,325,563.65 

2,033,419.80 

$23,659.10 

1853 

;o;,856.i5 

1854 

3,645,609.43 

1,612,189.63 

354,390.5; 

400,000.00 

440,000.00 

484,000.00 

532,400.00 

585,640.00 

1855 

1856 
185; 

1858 

1859 

1860 

4,000,000.00 
4,400,000.00 
4.840.000.00 
5'  324',  000.00 
5,856,400.00 
6,442,040.00 

$2,400,000.00 

2,640,000.00 

2,904,000,00 

3,194,400.00 

3,543,840.00 

3,865,224.00 

1 

$1,600,000.00 
i,;6o, ooo.oo 

1,936,000.00 
2,129,600.00 
2,342,560.00 
2, 516, 816.00 

Average  actual  increase  of  receipts  for  five  years,  ending  with 
1854,  thirty-three  per  cent. 

The  estimated  average  increase  of  receipts  for  six  years,  ending 
with  1860,  ten  per  cent. 

It  will  be  seen  from  the  above  statement  that  the  aver¬ 
age  increase  in  the  receipts  of  the  company  for  the  five 
years  ending  with  1854,  is  thirty-three  per  cent,  per 
annum.  We  consider  it  safe  for  the  six  years  next  suc¬ 
ceeding,  ending  with  1860,  to  rate  the  annual  increase  at 
ten  per  cent.,  and  have  therefore  assumed  that  sum  as  the 
basis  of  the  calculation. 

The  capital  of  the  company,  stock,  funded  and  floating 
debt,  all  told,  is  $23,928,561.38.  Assuming  in  addition 
the  balance  of  the  five  million  loan  now  in  the  hands 
of  the  city,  the  entire  capital  employed  will  then  be 
in  round  numbers,  $26,000,000,  the  annual  interest  upon 


12 


which  is  $1,560,000.  The  final  result  may  be  briefly 
stated  thus : 

Twelve  months  interest  on  total  in¬ 
vestment, . $1,560,000  00  f 

Add  annual  instalment  No.  3  bonds,. .  113,333  33 

- $1,673,333  33 

Average  annual  gross  receipts,.  . .  .$5,143,740  00 

Less  60  per  cent.,  working  expenses,  3,086,244  00 

- 2,057,496  00 

Surplus  for  contingencies, .  $384,162  67 

We  cannot  doubt  the  full  realization  of  the  estimates  of 
increase  in  the  trade,  even  though  no  new  avenues  should 
be  opened ;  but  we  are  led  to  increased  confidence  from  the 
fact  that  the  North-Western  Virginia  Kail  Road  will,  from 
efforts  now  made  in  its  behalf,  within  a  short  time  make  its 
connexion  with  this  Road,  and  be  in  successful  operation. 

It  makes  its  connexion  with  the  Baltimore  and  Ohio 
Railroad  at  Grafton,  and  strikes  the  Ohio  River  188  miles; 
below  Pittsburg,  and  half  that  distance  below  Wheeling, 
offering  in  connexion  with  our  road  the  most  convenient 
and  the  shortest  outlet  for  a  large  portion  of  the  trade  of 
the  Muskingum  Valley. 

This  valley  comprehends  in  all,  fifteen  counties  of  Ohio, 
containing  7,000  square  miles,  or  about  four  and  a  half 
millions  of  acres.  Its  population  in  1850  was  443,987, 
considerably  out-numbering  the  entire  white  population 
of  Maryland,  including  the  city  of  Baltimore,  being  sixty- 
three  to  the  square  mile,  exceeding  the  density  of  New 
England,  and  nearly  equal  to  that  of  New  York. 

As  a  grain  growing  region  this  district  is  unsurpassed 
by  any  in  the  United  States,  as  is  shown  by  the  tables  of 
the  assessors  of  1850.  The  wheat  raised  in  this  district, 
as  therein  stated,  is  11,072,784  bushels,  and  the  quantity  ^ 

of  corn  was  somewhat  greater.  The  opening  of  this  fruit¬ 
ful  region,  and  the  completion  of  the  Pittsburg  and  Con- 
nelsville  Rail  Road,  connecting  with  us  at  Cumberland. 


must  greatly  increase  the  trade  and  travel  on  our  road ; 
foreshadowing  an  early  day  when  all  that  part  of  the 
road,  east  of  their  connexions,  must  he  supplied  with  a 
second  track. 

The  future  alone  can  determine  what  amount,  if  any, 
additional  second_track  will  be  required  west  of  the  point 
of  connexion  with  the  North-Western  Virginia  Rail  Road. 
The  portions  already  laid  at  different  points  along  the 
entire  road  are  given  in  detail  on  the  diagram  herewith 
submitted,  amounting  to  88i  miles.  A  large  proportion  of 
the  recent  loan  from  the  city  ruas  granted  for  the  second 
track ,  and,  should  he  most  religiously  confined,  to  the  objects 
of  the  grant . 

The  tunnels  are  being  arched,  and  those  from  which 
danger  was  most  apprehended,  are  now  being  secured. 

The  Road-way  and  Machinery  are  in  excellent  condition, 
and  the  rolling  power  ample. 

The  several  departments  are  working  with  much  suc¬ 
cess  and  harmony,  and  in  point  of  efficiency  are  not  ex¬ 
celled  by  those  of  any  other  road. 

Much  of  the  success  and  favorable  condition  of  the  com¬ 
pany,  may  be  justly  attributed  to  the  zeal  and  ability  of 
its  chief  officer,  who  has,  at  all  times,  shown  himself  equal 
to  the  task  and  worthy  of  the  trust. 

A  list  of  u  Bills  Payable”  and  the  “  Pay  Roll”  embody¬ 
ing  in  detail,  much  interesting  information,  are  herewith 
presented.  They  are  sufficiently  explicit  in  themselves, 
and  therefore  need  no  note  or  comment.” 

And  now  when  there  are  some  prospects  of  our  long  de¬ 
ferred  hopes  being  realized,  we  may  well  pause  before  par¬ 
ting  (for  an  inadequate  consideration)  with  the  heavy  in¬ 
terest  which  we  have  at  stake.  It  is  true  that  the  sole  ob¬ 
ject,  which  the  city  had  in  view,  in  making  this  invest¬ 
ment,  could  not  have  been  the  mere  profit  of  a  partner  in 
the  enterprize.  It  would  be  unwise  and  contrary  to  expe¬ 
rience  to  suppose  that  her  legislators  had  no  higher  aim 
than  the  anticipated  dividends.  We  were  then,  as  we  are 


14 


yet,  in  the  midst  of  a  progressive  age.  Of  a  family,  every 
member  of  which  was  pressing  with  irrepressible  ardour 
and  indomitable  perseverance  for  the  rich  prize  of  the 
western  trade.  Our  natural  geographical  position,  placing 
us  nearer  to  the  great  West  than  any  other  seaboard  city, 
had  under  the  old  regime  of  turnpike  roads,  and  Conestoga 
wagons,  given  us  an  advantage,  which  we  were  extremely 
reluctant  to  yield ;  and,  the  almost  fierce  rivalry  which  we 
have  since  had  to  encounter,  lias  made  progress  but  a  mea¬ 
sure  of  necessity.  The  welfare  of  our  people,  the  future 
interests  of  our  fellow  citizens  of  every  class,  are  largely 
dependent  upon  the  road  maintaining  at  least,  its  present 
relative  position. 

And  yet  we  cannot  so  far  forget  the  history  of  the  past, 
as  to  admit  that  the  matter  of  profits  was  not  one  of  the 
elements  which  entered  into  the  calculations  of  the  Oity^ 
Councils,  when  this  road  was  projected  and  the  city  was 
induced  to  become  so  heavy  a  stockholder.  It  was  a  lead¬ 
ing  argument  made  use  of  by  its  friends,  and  perhaps  it 
had  more  than  its  proper  weight  in  an  excited  and  anxious 
community.  Any  hopes,  however  that  may  have  been  en- 
dulged  in,  as  to  early  returns,  were  doomed  to  disappoint¬ 
ment.  The  work  lingered  through  a  series  of  years,  cal¬ 
ling  for  aid  from  time  to  time  ;  first  from  one  quarter,  then 
from  another ;  the  city  of  Baltimore  and  State  of  Mary¬ 
land,  being  through  all  its  troubles,  its  most  reliable  and 
constant  friends. 

And  now  some  twenty-nine  years  having  elapsed  since 
we  first  engaged  in  this  enterprise,  it  well  becomes  us  to 
enquire  where  we  stand,  and  how  far  we  are  justified  in 
parting  with  our  participation  in  the  control  of  a  work, 
capable  of  exerting  for  good  or  evil,  so  important  an  in¬ 
fluence  upon  the  prospects  of  our  city  and  State. 

With  a  view  to  place  our  position  in  a  more  under¬ 
standable  light,  we  have  prepared  a  table  (marked  A,)  to 


15 

show  the  entire  liabilities  of  the  Company — dividing  them 
into  three  classes, 

First, — the  Stock  Debt. 

Second , — the  Bonded  Debt. 

Third, — the  Floating  Debt. 

Of  the  stock  debt  30,000  shares  par  value  $3,000,000  be¬ 
longs  to  the  State  of  Maryland,  and  is  prefered.  It  therefore 
more  properly  belongs  to  the  bonded  debt,  as  the  interest 
has  to  be  provided  for  it  the  same  as  on  the  bonds. 

The  table  B  of  the  estimate  earnings  of  the  road,  for 
the  ensuing  year,  based  upon  the  experience  of  the  past 
year,  together  with  an  estimate  of  its  receipts  from  all 
quarters,  is  introduced  to  show  the  reasonable  expecta¬ 
tion  that  may  be  entertained  of  the  ability  of  the  Compa¬ 
ny  to  pay  by  the  1st  of  April  next  cdl  its  expenses  ;  cdl  its 
interest  and  ground  rent ;  all  its  floating  debt ;  cdl  the 
balance  of  bonds  No.  1,  now  due,  and  the  only  portion  of 
its  bonded  debt,  that  will  fall  due  in  the  interval,  and  still 
leave  a  surplus  of  $157,957.26,  applicable  to  whatever  pur¬ 
pose  the  directors  may  deem  it  expedient  to  appropriate  it. 

Thus  it  will  be  seen  that  notwithstanding  the  wide¬ 
spread  commercial  distress  of  the  country,  not  only  has 
the  company  passed  from  under  the  cloud  which  cast  a 
shadow  upon  its  credit  and  seemed  to  shake  the  confidence 
of  its  friends,  but  it  has  been,  by  a  well  matured  and  a 
faithfully  administered  policy,  steadily  increasing  its  rev¬ 
enue,  and  carving  out  a  position  among  the  successful  en¬ 
terprises  of  the  age,  which  must  be  as  gratifying  to  those 
interested  in  its  success,  as  it  is  creditable  to  those  charged 
with  its  management. 

The  wisdom  of  the  policy  of  withholding  dividends  at  a 
time  when  the  company  was  pressed  by  a  large  floating- 
debt  and  its  credit  impaired,  is  already  fully  vindicated ; 
and  the  expectations  of  regular  cash  dividends  thereby 
placed,  we  may  hope  beyond  a  peradventure. 


4 


16 


The  table  C  is  intended  to  show  that  every  liability  for 
interest  and  ground  rent,  of  whatever  description,  for 
which  the  company  on  its  own  account  is  responsible 
(and  not  otherwise  provided  for,)  is  comprehended  in  the 
table  B. 

The  table  D  is  necessarily  hypothetical  in  its  character, 
and  only  such  consideration  as  is  due  to  estimates  of  a  like 
nature,  is  expected  to  he  accorded  to  it.  The  basis  of  an 
increase  of  ten  per  cent,  per  annum,  is  however,  so  far  be¬ 
low  the  ratio  indicated  by  the  actual  experience  of  the  past 
five  years,  that  we  can  scarcely  he  thought  to  have  in¬ 
dulged  in  over  sanguine  views  in  adopting  it. 

The  tables  E  and  F  will  show  the  disposition  of  the  five 
million  loan  from  the  city,  and  the  amount  expended  for 
second  track  and  tunnels. 

Table  G-  shows  the  amount  of  floating  debt  in  Novem¬ 
ber,  1853,  the  time  when  application  was  made  to  the  city 
for  aid,  and  the  amount  since  reduced. 

The  table  H  will  show  what  sum  per  annum  is  set 
apart  as  a  sinking  fund,  and  compounded  at  six  per  cent, 
per  annum  would  he  sufficient  to  cancel  every  debt  of  the 
company  as  it  may  mature  ;  a  sum  which  the  councils  will 
perceive  is  entirely  within  the  ability  of  the  company 
annually  to  appropriate. 

It  will  thus  he  seen  that  this  large  investment  of  the 
city  is  not  in  the  precarious  condition  which  the  fears  of 
many  of  us  have  foreshadowed. 

That  under  the  most  moderate  estimates,  based  upon 
actual  experience,  it  will  pay  a  reasonable  profit  to  every 
interest  involved,  and  leave  an  annual  surplus  sufficient 
eventually  to  cancel  its  whole  indebtedness. 

In  conclusion,  permit  us  to  say,  having  no  private  in¬ 
terest  to  advance,  or  unworthy  feelings  to  indulge,  we  have 
sought  to  place  the  true  state  and  condition  of  the  com- 


w 


17 


pany  before  you,  without  stain  or  color,  and  sufficiently 
comprehensive  to  cover  the  information  desired,  so  that 
your  action  upon  the  proposition  now  pending  before  you, 
may  be  the  result  of  an  enlightened  judgment. 

We  are,  gentlemen, 

Very  respectfully, 

Your  obedient  servants, 

John  H.  Barnes,  John  Dukeiiart, 

C.  13.  Hinks,  James  II.  Cook, 

John  H.  T.  Jerome,  James  C.  Buck, 

William  Adreon,  G-.  W.  Herring, 

John  T.  Mitchell, 

Directors  of  the  Baltimore  and  Ohio  Bail  Road  Co. 

ON  THE  PART  OF  THE  CITY  OF  BALTIMORE- 

Baltimore,  May  10th,  1855. 


Treasurer  s  Office ,  Baltimore  and  Ohio  Railroad  Company , 

Baltimore,  10th  Maj',  1855. 

The  accounts  A,  B  and  C,  on  pages  5,  6,  7  and  8,  having 
heen  submitted  to  me,  I  have  examined  and  found  them 
correct. 

J.  I.  Atkinson,  Treasurer 

of  the  Baltimore  and  Ohio  Railroad  Company. 


3 


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LIBRARY 
OF  THE 

UNIVERSITY  of  ILLINOIS 


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